Pepsi 2007 Annual Report Download - page 86

Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
PepsiCo, Inc.:
We have audited the accompanying Consolidated Balance
Sheet of PepsiCo, Inc. and Subsidiaries (“PepsiCo, Inc.” or the
“Company”) as of December 29, 2007 and December 30, 2006,
and the related Consolidated Statements of Income, Cash Flows
and Common Shareholders’ Equity for each of the years in the
three-year period ended December 29, 2007. We also have
audited PepsiCo, Inc.’s internal control over fi nancial reporting as
of December 29, 2007, based on criteria established in Internal
Control — Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission
(“COSO”). PepsiCo, Inc.’s management is responsible for these
consolidated fi nancial statements, for maintaining effective
internal control over fi nancial reporting, and for its assessment
of the effectiveness of internal control over fi nancial report-
ing, included in Management’s Report on Internal Control over
Financial Reporting. Our responsibility is to express an opinion on
these consolidated fi nancial statements and an opinion on the
Company’s internal control over fi nancial reporting based on
our audits.
We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the fi nancial state-
ments are free of material misstatement and whether effective
internal control over fi nancial reporting was maintained in all
material respects. Our audits of the consolidated fi nancial state-
ments included examining, on a test basis, evidence supporting
the amounts and disclosures in the fi nancial statements, assess-
ing the accounting principles used and signifi cant estimates
made by management, and evaluating the overall fi nancial
statement presentation. Our audit of internal control over fi nan-
cial reporting included obtaining an understanding of internal
control over fi nancial reporting, assessing the risk that a mate-
rial weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed
risk. Our audits also included performing such other procedures
as we considered necessary in the circumstances. We believe that
our audits provide a reasonable basis for our opinions.
A company’s internal control over fi nancial reporting is a
process designed to provide reasonable assurance regarding the
reliability of fi nancial reporting and the preparation of fi nancial
statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control
over fi nancial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reason-
able detail, accurately and fairly refl ect the transactions and
dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit
preparation of fi nancial statements in accordance with generally
accepted accounting principles, and that receipts and expendi-
tures of the company are being made only in accordance with
authorizations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition
of the company’s assets that could have a material effect on the
fi nancial statements.
Because of its inherent limitations, internal control over fi nan-
cial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compli-
ance with the policies or procedures may deteriorate.
In our opinion, the consolidated fi nancial statements referred
to above present fairly, in all material respects, the fi nancial posi-
tion of PepsiCo, Inc. as of December 29, 2007 and December
30, 2006, and the results of its operations and its cash fl ows
for each of the years in the three-year period ended December
29, 2007, in conformity with accounting principles generally
accepted in the United States of America. Also in our opinion,
PepsiCo, Inc. maintained, in all material respects, effective inter-
nal control over fi nancial reporting as of December 29, 2007,
based on criteria established in Internal Control — Integrated
Framework issued by COSO.
New York, New York
February 15, 2008
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